Hedge funds are not perfect. They have their bad picks just like everyone else. Micron, a stock hedge funds have loved, lost 50% during the last 12 months ending in October 30. Although hedge funds are not perfect, their consensus picks do deliver solid returns, however. Our data show the top 30 S&P 500 stocks among hedge funds at the end of September 2014 yielded an average return of 9.5% in the same time period, vs. a gain of 5.2% for the S&P 500 Index. Because hedge funds have a lot of resources and their consensus picks do well, we pay attention to what they think. In this article, we analyze what the elite funds think of Ignite Restaurant Group Inc (NASDAQ:IRG).
Ignite Restaurant Group Inc (NASDAQ:IRG) was in 8 hedge funds’ portfolios at the end of the third quarter of 2015. IRG has experienced an increase in support from the world’s most elite money managers recently. There were 6 hedge funds in our database with IRG holdings at the end of the previous quarter. At the end of this article we will also compare IRG to other stocks including Vince Holding Corp (NYSE:VNCE), Liberator Medical Holdings Inc (NYSEMKT:LBMH), and Wheeler Real Estate Investment Trust Inc (NASDAQ:WHLR) to get a better sense of its popularity.
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With all of this in mind, we’re going to take a look at the key action regarding Ignite Restaurant Group Inc (NASDAQ:IRG).
How have hedgies been trading Ignite Restaurant Group Inc (NASDAQ:IRG)?
At Q3’s end, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 33% from the second quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Skylands Capital, managed by Charles Paquelet, holds the largest position in Ignite Restaurant Group Inc (NASDAQ:IRG). Skylands Capital has a $6.4 million position in the stock, comprising 0.9% of its 13F portfolio. On Skylands Capital’s heels is Chuck Royce of Royce & Associates, with a $3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining members of the smart money with similar optimism consist of Bryant Regan’s Lafitte Capital Management, Jim Simons’s Renaissance Technologies and Ken Grossman and Glen Schneider’s SG Capital Management.
As one would reasonably expect, some big names have been driving this bullishness. Renaissance Technologies, managed by Jim Simons, established the biggest position in Ignite Restaurant Group Inc (NASDAQ:IRG). Renaissance Technologies had $0.2 million invested in the company at the end of the quarter. Ken Grossman and Glen Schneider’s SG Capital Management also made a $0.1 million investment in the stock during the quarter. The only other fund with a brand new IRG position is Matthew Hulsizer’s PEAK6 Capital Management.
Let’s check out hedge fund activity in other stocks similar to Ignite Restaurant Group Inc (NASDAQ:IRG). These stocks are Vince Holding Corp (NYSE:VNCE), Liberator Medical Holdings Inc (NYSEMKT:LBMH), Wheeler Real Estate Investment Trust Inc (NASDAQ:WHLR), and Zynerba Pharmaceuticals Inc (NASDAQ:ZYNE). This group of stocks’ market valuations are similar to IRG’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VNCE | 18 | 18996 | 1 |
| LBMH | 7 | 12445 | 1 |
| WHLR | 7 | 30444 | -2 |
| ZYNE | 4 | 23146 | 4 |
As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $21 million. That figure was $13 million in IRG’s case. Vince Holding Corp (NYSE:VNCE) is the most popular stock in this table. On the other hand Zynerba Pharmaceuticals Inc (NASDAQ:ZYNE) is the least popular one with only 4 bullish hedge fund positions. Ignite Restaurant Group Inc (NASDAQ:IRG) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard VNCE might be a better candidate to consider a long position.
